Convert a VIDEO_TS folder with subtitles to MP4 with hardsub?

I have a VIDEO_TS folder of a series that I would like to convert into MP4 (or any other high quality format), so that I may watch it on my XBOX 360 (via Vuze or a flash drive). However, I noticed that each video in the folder has 2 subtitle tracks. I'd like to convert these and hardsub the second subtitle track. If there's no way to choose a track, then the first one will do I suppose.

Does anyone know of a way to do all of this? Any help is appreciated. Thanks!:)

I'm running OSX 10.8.3 on a MacBook Air (1.8GHz Core i5 + 8GB RAM)